Correlation Between New Hope and TongFu Microelectronics
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By analyzing existing cross correlation between New Hope Dairy and TongFu Microelectronics Co, you can compare the effects of market volatilities on New Hope and TongFu Microelectronics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in New Hope with a short position of TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and TongFu Microelectronics.
Diversification Opportunities for New Hope and TongFu Microelectronics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and TongFu is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics and New Hope is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on New Hope Dairy are associated (or correlated) with TongFu Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TongFu Microelectronics has no effect on the direction of New Hope i.e., New Hope and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between New Hope and TongFu Microelectronics
Assuming the 90 days trading horizon New Hope Dairy is expected to under-perform the TongFu Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, New Hope Dairy is 1.11 times less risky than TongFu Microelectronics. The stock trades about -0.27 of its potential returns per unit of risk. The TongFu Microelectronics Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,642 in TongFu Microelectronics Co on November 5, 2024 and sell it today you would earn a total of 188.00 from holding TongFu Microelectronics Co or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. TongFu Microelectronics Co
Performance |
| Timeline |
| New Hope Dairy |
| TongFu Microelectronics |
New Hope and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and TongFu Microelectronics
The main advantage of trading using opposite New Hope and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, TongFu Microelectronics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in TongFu Microelectronics will offset losses from the drop in TongFu Microelectronics' long position.| New Hope vs. China Mobile Limited | New Hope vs. Newcapec Electronics Co | New Hope vs. Bank of Communications | New Hope vs. Quectel Wireless Solutions |
| TongFu Microelectronics vs. Financial Street Holdings | TongFu Microelectronics vs. Unisplendour Corp | TongFu Microelectronics vs. Postal Savings Bank | TongFu Microelectronics vs. China Asset Management |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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